E-Marketing Professionals

Product Research

Marketing research departments conduct product research for a variety of reasons, including:

• Measuring potential acceptance of new products
• Finding improvements or additions for existing products
• Making changes or improvements in product packaging
• Determining acceptability of a product over a competitor's product

When a new product is being developed, marketing research departments will often use product concept testing to see how customers might react to the new product. Typically, before a business invests in the development of a prototype for a new or improved product, it will have its marketing researchers verbally describe or visually depict the prospective product to a group of potential customers in the target market.

Once a product has been accepted during the concept-testing stage, the business may move on to develop a prototype of the product. The marketing research department may then conduct product use tests, in which potential customers—be they industrial users or consumers—are given the new or modified product to try. Consumers may be given a new type of hot breakfast cereal to try at home so that the marketing researcher can test the product use among families; industries may be given a new type of telephone system to test in their offices so that the marketing researcher can receive management's evaluation of the system and see how the new product works in a field test site.

After product concept and product use tests are completed, businesses may decide to use market tests before they go full-throttle into the marketplace with their products. These market tests allow the business tp see how the product is accepted in various market segments before it is rolled out to the mass market, and before the business invests in a full-blown release of the product. While test marketing is viable for producers of products that do not involve millions of dollars in production costs for production facilities, it may be cost-prohibitive for businesses producing large, expensive goods. Soap detergent is easily test-marketed for a relatively inexpensive price tag; the cost of test marketing jet airplanes, on the other hand, is not cheap.

Pricing Research
Marketing research can be used to evaluate the acceptability of product or service prices in the marketplace. While businesses must price their products to make enough money to cover production and operating costs, often the formula they use for achieving a given profit margin causes them to price their products or services above or below acceptable market levels.

Pricing research activities conducted by marketing researchers to determine buyers' perception of price and quality factors in a given product can be used to determine acceptable price levels that will allow businesses to achieve desired profits and gain market share. Marketing research can help to determine acceptable price levels. Because of the competitive marketplace, however, businesses frequently do not have the time to conduct an elaborate pricing research study; therefore, they often enter the marketplace without conducting one.